Change in Ownership

PostOctober 11, 2017

Can two otherwise qualified taxpayers who have recently sold their separately owned original properties combine their claim for Proposition 60/90 benefit when they buy a single replacement dwelling together?

No. They can only receive benefit if one or the other, not both, qualifies by comparing his/her original property to the jointly purchased replacement dwelling. The implementing legislation specifically disallows combining a claim in this manner regardless of whether the replacement dwelling co-owners are married or not.

For the transfer to be effective under Proposition 90, the transfer must be a participating county. Currently, those counties are Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernadino, San Diego, Santa Clara, Toulumne and Ventura.

When making the “equal or lesser value” test comparison, is a simple comparison of the sales price of the original property and the purchase price/cost of new construction of the replacement all that is needed?

No. The comparison must be made using the full market value of the original property as compared to the full market value of the replacement dwelling as of its date of purchase or completion of new construction. This is important because sales or purchase price is not always the same as market value. The assessor must determine the market value of each property, which may differ from sales price.

If the full cash value of my replacement dwelling slightly exceeds the “equal or lesser value” as compared to the full market value of my original property, can I still benefit?

Yes. If an original property was sold the same day or was sold before purchasing the replacement dwelling. 105% of the market value of original property as of its date of sale within one year & 110% of the market value of original property as of its date of sale within two years.

My parents died & the children inherited the property. Why are we receiving a notice of possible reassessment?

But we sold the property. Do we still need to submit the claim form?

Yes. The possible reassessment covers the time period between the date of death & the date of sale. Without the claim form, that time period will be reassessed & a supplemental bill sent. Upon selling the property to a third party, the children only have 6 months from the notice date of a supplemental or escape notice to submit the claim form. Please make certain that the San Mateo County Assessor-County Clerk-Recorder’s Office, Assessor Division has the correct address for the executor/successor trustee or other responsible party for the estate.

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